DOCUMENT RESUME ED 386 323 PS 023 579 AUTHOR Kendall, … · 2014-07-18 · DOCUMENT RESUME. ED 386 323 PS 023 579. AUTHOR Kendall, Earline D. TITLE Long-Tet... Economic Benefits

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ED 386 323 PS 023 579

AUTHOR Kendall, Earline D.TITLE Long-Tet... Economic Benefits of Preschool Services and

the Potential Impact of Privatization.Jul 9515p.; Paper presented at the Meeting on SocialProtection and Social Care (Komotini, Thrace, Greece,June 26-July 2, 1995).Information Analyses (070) Speeches/ConferencePapers (150)

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ABSTRACT

MF01/PC01 Plus Postage.*Cost Effectiveness; Federal Government; FinancialSupport; *Government Role; Poverty Programs;*Preschool Education; *Privatization; *SocioeconomicInfluences

This paper addresses the importance of a high qualitypreschool education for children living in poverty, the long-termeffects of such an educational experience, the long-term economicbenefits to the children enrolled and their families, and thepotential impact of privatization on preschool services. Thecost-effectiveness and cost-benefits of early childhood educationdiscussed are based on the 27 years of longitudinal data of the PerryPreschool Project (PPP). Research on the PPP has concluded that eachdollar invested in high quality preschool education saved the public$7.61 of special services later. The paper also discusses the impactof political change in the United States and Eastern Europe ondecentralization and privatization of educational services, includingHead Start in the United States. It recommends that the U.S.government should: (1) provide economic and political incentives forthe voluntary nonprofit sector to fill the void left when governmentsno longer provide needed services for children; (2) implementappropriate regulations and guidelines to protect children served byvoluntary nonprofit agencies; and (3) fund adequately preschoolservices for children who are economically at-risk. (Contains 27references.) (MDM)

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Privatization and Preschool Education

00Long-Term Economic Benefits

of Preschool Servicesand the

Potential Impact of Privatization

MAT:. 'eta..., tA`; GhAr,i'ro

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,

Earline D. Kendall, Ph.D.

Peabody College, Vanderbilt UniversityNashville, Tennessee

USA

THEMATIC AREA:Social Protection and Social Care

Komotini, Thrace, Greece.

June 26 - July 2, 1995

BEST COPY AVAILABLE

2Privatization and Preschool Education

Abstract

Increasing numbers of children are living in poverty in Eastern Europe, the UnitedStates, and throughout the world. Periods of political upheaval, such as Eastern Europe'sadjustment to a market economy, impact vulnerable populations; young children are amongthe most vulnerable. When rapidly increasing levels ofpoverty occur, services for poorchildren are especially significant. This paper addresses (1) the importance of a highquality experience in the early childhood years for children living in poverty, (2) the long-

term effects of such a preschool experience, (3) the long-term economic benefits to thechildren enrolled, to their families, and to society, and (4) the potential impact ofprivatization on preschool services. This paper reviews political changes affecting children

during the decentralization of FAstern Europe and the current privatization movement in theUr ited States.

The cost-effectiveness and cost-benefits of early childhood education discussed arebased on the 27 years of longitudinal data of the Perry Preschool Project, the Cost, Qualityand Child Outcomes in Child Care Centers study released in 1995, and 25 years ofcomparative data from the International Association for the Evaluation of EducationalAchievement (IEA) and its recent Preprimary Project. The paper addresses the role ofprivatization and its possible impact on services to young children. Recommendations formaintaining or establishing appropriate preschool services to ameliorate the effects of

poverty include: (1) Providing economic and political incentives for the voluntarynonprofit sector to fill the void left when governments no longer provide needed servicesfor children; (2) Implementing appropriate regulations and guidelines to protect childrenserved by voluntary nonprofit agencies; (3) Funding adequately preschool services forchildren who are economically at-risk.

Ii


Times of political and economic change produce the greatest stress on the most

vulnerable members of the population. In the United States the current political climate is

one of diminishing the role of government and cutting social and educational services. InEastern Europe the fall of communism also brings a diminishing role for governments andthe search for private support for what were formerly services provided by the government.In both the East and the West "the challenge is to protect children and other vulnerable

groups while the economies are going through the throes of transition" (James P. Grant

cited in Cornia & Sipos, 1991, p. xxi). This paper addresses the needs of young childrenduring the current restructuring of the economies and societies ofFastern Europe and theUnited States.

Context of the DiscussionChildren throughout many areas of the world are growing up as part of an

underclass whose members are undereducated and unskilled; theyare increaf;ingly at-risk

for health problems, school failure, and missing the benefits of social and economic

progress. Many of these problems can be ameliorated or prevented by addressing the

needs of children during the prenatal and preschool periods. "Investment in childhood isthe best guarantee against poverty and social costs later in life, as well as an investment in

national productivity" (Esping-Andersen & Micklewright, 1991, p. 46).

Increasing Numbers of Children Living in Poverty

Whether in Eastern Europe, the United States, or other parts of the world, there isgrowing awareness of the effects of poverty on the lives of young children. There isincreasing evidence that preschool experience impacts young children's school achievement

and their potential earning power as adults (Schweinhart, Barnes, & Weikart, 1993). Thenumber of children living in poverty is growing in Eastern European countries (Sipos,1991, p. 4) and in the United States. One in four infants and toddlers in the United Staiesis living below the poverty line (Carnegie Task Force, 1994, p. 3). "During the decade of .

the 1980s, 4 million more American children fell below the official poverty line even asaverage incomes rose and the economy as a whole grew by 25%" (Grant, 1995, p. 3). Thepercentage of low-income children "lifted out of poverty" is 8.5% in the U.S. whileSweden, France, the Netherlands, and the United Kingdom have percentage rates above73% (Children's Defense Fund, 1994, p. 7).

The major issues discussed in this paper are (1) the importance of a high qual it,preschool experience in the early childhood years for children living in poverty, (2) the

long-term effects of such preschool experience, (3) the continuing economic benefits to the

4


children enrolled, to their families, and to society broadly, and (4) the potential impact ofprivatization on preschool services for children. I make recommendationsat the end of thepaper based on information gained from the International Association for the Evaluation of

Educational Achievement's (WA) Preprimaty Project, the 27 years of longitudinal datafrom the Perry Preschool Project, the Consortium for Longitudinal Studies, Head Start, theCost , Quality, and Child Outcomes in Chiki Care Centers, and the United NationsChildren's Fund (UNICEF).

From the time of Plato and Aristotle children have been recognized as havingspecial needs during the formative years. Rousseau emphasized the nature of children;Pestalozzi built his farm program for poor children oi Rousseau's Emile. Montessoriaddressed the needs of urban, poor children in Rome. Owen added a school for thechildren working in his factories. During times of political and social transformationsocieties refocus on children. Examples of political changes that have impacted children'sservices provide a context for this discussion.

Political Changes Impacting Children's Services

During periods of social upheaval the most vulnerable populations are at particularrisk. The 1994 U.S. election changed the way the federal government does business.

Social and educational services that have been in place under decades of Democratic controlof Congress are threatened.

Head Start emerged during the Civil Rights era as a center piece of LyndonJohnson's War on Poverty. After 30 years of compensatory education for America'spoorest children who are at risk of school failure, Head Start is once again mobilizing

sources of support. In 1995 there are more young children living below the poverty linethan before. More mothers of young children are in the work force; more welfare mothers

are required to go to work. To curtail Head Start and block grant child care services at atime of increasing need throws the burden of services for young poor children to non-government sources.

Political events surrounding the overthrow of communism have brought about asimilar upheaval in societies formerly under the U.S.S.R. Governments have opened upservices that were long their purview for private funding sources to become active.

Decentralization of Eastern Europe. As political events in Eastern Europe changedthe way economic factors of those countries affect social and educational services, "thefailed state socialist project [demonstrates] why the state-managed united economic andsocial policy had tc give way to more democratically contrelled and more pluralistic

economic and social policies" (Deacon & Szalai, 1990, p. 1). "Market-oriented economicreforms reduce the importance of social policy regarding it as a burden on the economy;

;)


with a consequent widening of inequalities, a privatization of some services and a lowering

in the level of social security provided by the State" (p. 17). Five policy streams related tohalting the expansion of the welfare state impact public policy: retrenchment in public

spendiag, governmental decentralization, debureaurcratization, deregulation, and

deinstitutionalization (Kramer, Lorentzen, Me lief, & Pasquindli, 1993, p. 2). The Statethen becomes a partner, patron, or purchaser of services of voluntary nonprofitorganizations, seeking "a very delicate balance between the established order and the newinitiatives" (Lane & Ersson, 1990, p. 31).

Privatization. As the United States Congress functions in an increasingly

conservative mood, and is politically aligned in opposition to its president, the governmentis limiting funds for social and educational services, including those for prenatal andpreschool populations. The next few years will be a period of rediscovery by both the

Eastern-bloc countries and the United States concerning the special advantages of the

voluntary nonprofit sector. Hill (1994) is attracting considerable attention for his notion ofthe privatization of U.S. education; boards of education are contracting with privatebusiness to run their public schools. Early education is even more likely to be funded bythe private sector with its long history of programs sponsored by both public and privateagencies.

The next section of the paper addresses the long-term effects of early education andthe cost and benefits derived from high quality preschool programs, especially for poorchildren.

The Persistent Effects of Early EducationStudies during the decade of the 1950s revealed the malleability of the intelligence

(IQ) of young children, depending on the stimulation they experience, their nutrition, and

involvement of parents (Hunt, 1961). The idea that IQ could be increased was a new one,emerging at the time the United States was shaken by the 1957 launching of Sputnik by theSoviet Union. The country was experiencing a major upheaval as the Civil Rights

movement unfolded; drastic measures were required. The resources and commitment toaddress past and present inequities were available. FArly intervention became the means tosave the next generation.

Significance of Findings from Preschool Data

Consortium for Longitudinal Studies

The U. S. government funded more than a dozen experimental programs between1958 and 1969 in an attempt to discover the appropriate model for the national Head Startprogram'(Lazar, Darlington, Murray, Royce, & Snipper, 1982). These research programshad experimental designs with children randomly assigned to experimental programs or to


a control group of no preschool program. Each program developed a distinctive curriculum

and carefully trained teachers and home visitors to ensure their adherence to the model.

Researchers assessed children with pre- and post-tests during the preschool years andbegan following their progress as they entered primary school.

The various curricular models improved children's IQ scores about 7 to 11 points;their school achievement was higher than children in the control gioups. However, by thetime children reached fourth grade the differences between the experimental and controlgroups in children's IQ and achievement scores evaporated. Favorable outcomes acrossthe dozen projects participating in the consortium's longitudinal study clustered around thefollowing factors: "the earlier the intervention, the better; the fewer children per adult, thebetter; the more home visits by the staff, the better, the more involvement by the parent [thebetter]; and programs which offered services to parents as well as their children had

somewhat better outcomes" (I 27ar, 1990, p. 371). As they moved through school theywere less likely to be retained in a grade or be placed in special education classes. Girls

who became pregnant were more likely to return and finish high school. Experimentalsubjects were more likely to seek post-secondary schooling or training.

The consistency of the fmdings of all twelve programs in the longitudinal studylends support to the importance of the early years, particularly for poor children(Consortium for Longitudinal Studies, 1983). Even though the original goal of raising IQscores proved to be a short-term gain, the benefits to the participants and society are realand lasting. The stalisticians reviewing the Consortium data took particular care to reportdata conservatively. In spite of the deliberate differences in program models, curricularvariations, and the young age of the participants, robust, positive outcomes persisted intoadulthood.

Perry Preschool Project

One of the programs in the Consortium for Longitudinal Studies was the PerryPreschool Project (PPP), now known as High/Scope. The participants in PPP have beenfollowed longer than those in any of the other consortium studies. The latest data releasedin 1993 are based on participants' liws at age 27 (Schweinhart, Barnes, & Weikart, 1993).The major difference in the High/Scope data compared to the other consortium studies,other than the length of the follow-up period, is that High/Scope calculated economicbenefits to society based on the lives of the experimental children versus those in thecontrol group. The experimental children participated in a cognitive-oriented curriculumwhen they were three and four years old. At age 27 the experimental group, whencompared to the control group with no preschool program, had half the number of arrests,four times as many earning $2,000 or more per month, three times as many owning their


own homes, one third more graduating fr.om high school on time, one fourth fewerrequiring welfare services as adults, and one third fewer out-of-wedlock births.

Cost benefits. A cost-benefit analysis calculated program costs with benefitsestimated for: (a) the value of child care, (b) reductions in the costs of public education, (c)increases in earnings, (d) reductions in welfare payments, and (e) reductions in the costs ofcrime (Barnett, 1992, p. 300). Schweinhart, Barnett, and Weikart (1993), therefore,conclude that each dollar invested in high quality preschool education saves the public$7.16 of special services later. David Weikart has convinced state legislatures to increasetheir spending for at-risk preschoolers based on these fmdings. Even though Lazar andothers have suggested that the economic data do not support a one-to-seven benefit, there isgeneral acceptance of substantial savings based on lack of school failure and assignment tospecial education classes. Barnett (1992) summarized 22 studies of compensatorypreschool education; all 22 studies found the same pattern of early effects (p. 282). "Thestudies reviewed suggest that compensatorypreschool education has an important effect onlong term school success, especially as indicated by school attainment, retention, andspecial eduQttion placement, but do not find that there are persistent effects on IQ or,usually achievement" (p. 292).

Head Start

Based on the political ,:.:stnands for equity and access for all citizens during the CivilRights era in the U.S., and on the cumpensatory education models of the Perry PreschoolProject and other consortium models, Head Start was begun in 1965 with high hopes. Bythe 1970s the economy had lost its vigor; the mood of the country and its politicians hadchanged from what it had been in the early Civil Rights period. The government thencommissioned the Westinghouse Learning Corporation and Ohio State University toevaluate Head Start's impact on elementary children with Head Start experience. TheNixon administration used this study to support the idea that IQ gains of Head Startchildren were obliterated within a year (I 2 nr, 1990, p. 367) and the time was right to cutHead Start funding. Now, after 30 years of operation, Head Start serves a mere 30% ofeligible children and has not known full funding since its earliest days.

In spite of critical funding cuts soon after its inception, Head Start continues toreceive political 'protection' as the right thing to do for poor children at-risk for schoolfailure. Parents have participated in Head Start from the beginning and supported HeadStart ardently; many now work in Head Start centers. The Consortium's longitudinaleducational outcomes, and High/Scope's economic benefits have convinced U.S.legislators and Congress that funding preschool programs for poor children is worth thecosts involved. President Clinton came into office declaring his strong support for Head

o


Start and its expansion. Under a conservative Congress, Head Start's future is linked tohealth and welfare reform and support for additional day care services for the workingpoor.

Cost. Quality, and Child Outcomes in Child Care Centers

Since the Women's Movement increased the number ofwomen in the work forcewith children under the age of six, child care outside the home has become the norm in the

U.S. "The Cost, Quality, and Child Outcomes Study provides the first comprehensiveeconometric and psychometric analysis of child care and children's outcomes" (Executive

Summary, 1995, p. 1). After studying child care in California, Colorado, Connecticut,and North Carolina the investigators concluded "that only 1 in 7 centers provides a level ofchild care quality that promotes healthy development and learning. .[and] that care forinfants and toddlers may be even lower quality than previously thought" (p. 10). NorthCarolina had centers with the lowest quality, and of the four states studied North Carolinahas the lowest child care licensing standards. The Cost and Quality study found that for-profit and church-affiliated centers provide lower quality services than centers operated by avariety of public agencies, worksite centers, and other programs with public funding. Thisstudy suggests that larger centers and those with full capacity can reduce costs, therebyincreasing quality.

Costs, revenue, and support. The authors state their econometric analyses in termsof the expended costs (cash costs incurred to run centers), donations (goods and servicesdonated to support child care), foregone wages (difference between wage earned in childcare and the wage a staff person could earn elsewhere based on education, gender, age,race, and marital status), fidl cost (amount to operate centers if all costs were included),andtotal revenue (total amount of income received by the center). "Center child care, evenmediocre-quality care, is costly to provide. Even so, donations and foregone wages arelarge, accounting for more than one-fourth of the full cost of care" (p. 5). This studyestimates thefid/ cost of "center care services is $2.83 per child hour, or $.72 per childhour more than expended costs" (p. 5), further evidence of the subsidy that staff paid lowwages make to child care.

One of the more interesting findings of this complex study is that good-qualityprograms cost more than mediocre quality, but not a lot more. The additional cost to offergood-quality services compared to mediocre-quality care was about 10% They found thatparent fees represent only about 71% of center revenue and 55% of full cost (p. 7)indicating the necessity of funding sources in addition to parent fees. Although cost of carevaried across the four states, the study found strong competition in local markets. Bothprofit and non-profit sectors realize similar low rates of profit or surplus (3.7%) (p. 9).


International Data SourcesUnited Nations Children's Fund (UNICEF)

UNICEF's 1990 World Summ:t for Children set goals for reducing illiteracy,deaths, malnutrition, disease and disability: five years later, a majority of nations are

moving toward achieving most of these goals. UNICEF data from forme: U.S.S.R.countries are sparse compared to the other country categories listed; however, adult literacyranks in the 99 percentile for adults in these countries (UNICEF, 1995, p. 84), among thehighest in the world. The under-5 mortality rate in 1993 ranked at the lowest in the worldin former U.S.S.R. and industrialized countries (p. 85).

The vast majority of nations, 167 in 1995, have ratified the U.N. Convention onthe Rights of the Child. "The Convention, [is] widely considered to be the mostprogressive, detailed, and specific human rights treaty ever adopted by the Member Statesof the United Nations" (NAEYC Public Policy Alert!, March 2, 1995, p. 4). Only 14nations, including the United States and Saudi Arabia, have not signed on as of March,1995. The U.S. continues an ambivalent relationship with the United Nations. Far-rightpolitical groups see the United Nations as a threat to nationalist concerns.International Studies

International Association for the Evaluation of Educational Achievement (LEA)

"The International Association for the Evaluation of Educational Achievement (IEA), a nongovernmental, nonprofit organization of research institutions in 45 countries, is wellknown for its 25 years of comparative international surveys in science, mathematics,

written composition, and other academic areas" (Olmsted & Weikart, 1989, p. ix). "TheIEA Pieoimary Project [with 14 participating countries] is an ongoing international studyinvestigating the nature, quality, and effects of the ex; eriences of children prior to formalschooling" (p. xxi). Recurring themes of the LEA pieoimary study are "deficits in serviceavailability, in agency coordination, and in personnel quality" (p. 402).Policies on Children's Services

Some countries have no explicit policy governing young children's care andeducation that applies to all families (p. xxi). The United States' array of policies reflects ahistorical consensus that families, rather than the government, should be responsible forchildren's early experiences. Many European countries, in contrast, have explicit nationalpolicies with specific quality standards of care and education. In developing countriesnational early childhood policies often are in dramatic contrast with the daily reality. The

decreasing infant morality rate, the increase in one-parent families, and the participation of


women in the labor force around the world increases the number of young childrenrequiring child care services.

Countries are examining their national data collected for the Preprimary Project inthe context of broader, international findings. Phase 1 of the Preprimary Project reportshousehold surveys from eleven countries (Olmsted & Wellcart, 1995). Portugal set goalsto move from serving approximately 30% of preschool children to serving 90% of five-year-olds by 1993 (p. 9). In Albania until 1955, only 56.3% of children attendedkindergarten; the goal is 100% to attend state kindergartens by 2000. "Early education hasemerged from the context of the family, while primary schooling is the sole responsibilityof the state and includes all Albanian children" (Dedja, 1992, p. 29). "Since November,1989, processes aimed at transforming the county into a democratic and constitutional stateand at demolishing the totalitarian administration have taken place in Bulgaria. This willinevitably lead to a change in the system of preschool education--in its forms, methods, andmeansthat will promote humanistic and democratic principles" (Radev, 1992, p. 146).

Hungary (Pereszlenyi, 1992) and Albania (Dedja, 1992) report one teacheroverseeing as many as 150 children during the 1800s. As early as 1891 Hungary madenursery education compulsory, but not universally available (Pereszlenyi, 1992). Nurseryschools were nationalized in 1948. "Recent rapid changes in the Hungarian political andsocial life exert an influence on the development of preschool education. . . .The state'smonopoly over institutional education has been terminated. .. . Modifications to theEducation Act in 1990 allowed churches, denominational schools, and even individuals theright to organize and maintain nursery schools. The resultant possibility of 'multiple'maintenance will obviously cause conceptional changes as well as a wider choice in thefuture. . . .Structural changes in the national economy and privatization raise theresponsibility of the state to fmance large-scale optional preschool preparatory institutionalsystems" (Pereszlenyi, 1992, p. 262). There has been no national curriculum in Hungarysince 1986.

Bush and Phillips (1994) describe conceptions of quality early care and educationfrom countries around the world. Their efforts toward "Expanding the Lens on Child Care:International Approaches to Defining Quplity" helps to broaden the debate about qualityprograms for young children by comparing examples from other countries and theconceptions of quality that recur across countries. They found quality could be defined interms of school preparation, a homelike environment, environmental safety, or group size(p. 1). Societies differ in their view of whether child care is a right or a privilege. Incountries where child care is considered a right, a coherent family policy '.isually is in place.They "examined public or governmental child care systems as means of uncovering


dominant quality perceptions operating in a particular region or country" (p. 3). They, too,found a gap between beliefs and practices.

"Child care systems [often] originate as custodial care only for those childrendeemed to be 'at risk' economically or socially, and then gradually evolve into moreuniversal coverage with more developmental or educational curriculum" (p. 5). TheScandinavian countries generally set the standard for child care. At the other end of thecontinuum, many developing countries base their child care services in health departments,indicating a survival orientation.

Free market societies value choice, autonomy, and privacy of the family related tochild care issues. "Consistent with this ethos is the idea that private market provision ofchild care, without needless government intervention, is the best way to truly help families"(p. 27). In such a setting, publicly provided child care is frowned upon by society, whichlimits the provision of services, thereby conveying the message that mothers should stayhome with their children.

RecommendationsAs "the state-managed united economic and social policy . . .give[sl way to more

democratically controlled and more pluralistic economic and social policies" (Deacon &Szalai, 1990, p. 1) "market-oriented economic reforms [will cause a] widening ofinequalities, a privatization of some services and a lowering in the level of social securityprovided by the state" (p. 17). One way to ameliorate the effects of diminished socialservices provided by the government is "a rediscovery by both the Right and the Left of thecivil society [of] the special advantages of Voluntary Nonprofit Organizations (VNPO)(Kramer, Lorentzen, Melia, & Pasquinelli, 1993, p. 1). In this era of retrenchment inpublic spending, governmental decentralization, debureaucratization, deregulation, anddeinstitutionalization in both the East and the West voluntary nonprofit organizations willnecessarily play an enhanced role in providing preschool services.

Recommendation 1

Provide economic and political incentives for the voluntary nonprofitsector to fill the void left when governments no longer provide neededservices for children.

Governments can require corporations investing in their countries to provideworkers subsidized child care; they can require communities to set aside land and space forchildren's services.


Recommendation 2

Implement appropriate regulations and guidelines to protect childrenserved by voluntary nonprofit agencies.

The Cost and Quality study provides convincing evidence that appropriate

regulations positively influence qualit:' and that lower standards enable the existence oflower quality services. States with low requirements had low quality programs comparedto states with higher regulations. Where regulations exempt certain programs, such aschurch-sponsored preschools or Montessori programs, program quality usually declines.Government regulations should ensure minimum standards and a safety net for all children.

Recommendation 3

Ensure adequate government funding for preschool services forchildren economically at-risk.

"Although a positive economic return is not sufficient reason for a government tomake an investment, it is presumed that other public expenditures have much less favorableevidence of positive returns" (Barnett, 1992, p. 301) than investment in the early years of

poor children. "Compensatory preschool education can be an economically efficient and

politically palatable public investment" (p. 304).

"The economic incentive for early intervention lies with the taxpayers who receive

more than enough economic benefits to make it an attractive investment" (Basnett &

Escobar, 1989, p. 685). Evidence of the cost-effectiveness of high quality preschoolprograms has enabled them to become part of the social safety net. "The common focus of!political restnicturing] must be to give the protection of the normal physical, menta1, alid

emotional development of children a first call on our concerns and capacities" (Grant,1995, p. 60). The state of the world's children can be improved with help from the

government and private sources working together to address their needs.

I t)


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